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Industry Research : US Pay-TV Still Ranks Third Worst in Customer Satisfaction

Subscription television service ended a three-year run of stagnating customer satisfaction with a 3% gain to reach an American Customer Satisfaction Index (ACSI) benchmark of 68. While the boost is good news for cable, satellite and fibre-optic television providers, the industry remains the third worst of the 43 industries covered in the ACSI.

Among TV service providers, those offering service via fibre optics or satellite earn the best marks for customer satisfaction. On average, fibre optic/satellite services receive an ACSI score of 72 compared with 63 for cable service.

Verizon (FiOS) stays in first place at 73 (-1%), with DIRECTV at 72 and AT&T (U-verse) at 71 close behind after strong gains of 6% and 4% respectively. DISH Network rounds out the above-average group with a near-steady benchmark of 70 (+1%).

While most cable providers did better in 2013, all remain below the national ACSI average. Cox Communications leads at 65 (+3%), but is chased by a much-improved Charter Communications at 64 (+8%) and a modestly stronger Comcast at 63 (+3%). Time Warner Cable saw a backslide, dropping 5% to an industry low of 60.

"While nearly 90% of households have some form of TV subscription, the industry is facing small, but growing, competition from Internet video streaming," said ACSI director David VanAmburg. "The industry's pattern of yearly price increases, coupled with sporadic reliability, keeps customer satisfaction low relative to other household services and vulnerable to new technologies that enter the market."

Subscription TV customers gave picture quality strong ratings for both HD and basic resolution, but found call centre service to be lacking compared with most other industries.

Overall, after years of having a dismal track record among consumers when it comes to customer satisfaction, communications providers, including pay-TV operators, saw their ACSI ranking climb 0.6% this year to reach 72.3 on a 100-point scale. The improvement has helped the national customer satisfaction benchmark up 0.4% to 76.6.However, the increase in the information sector benchmark — the combined aggregate score for wireless telephone service, Internet service providers (ISPs), subscription television service, cellular telephones, fixed-line telephone service and computer software — is still not particularly good, ACSI said.

"Customer satisfaction with the information sector is improving, but none of these industries score higher than the national average," said Claes Fornell, ACSI founder and chairman. "Limited competition combined with high consumer expectations for information services are a formula for relatively weak buyer satisfaction, despite the gains."